Correlation Between Bucher Industries and SFS Group
Can any of the company-specific risk be diversified away by investing in both Bucher Industries and SFS Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bucher Industries and SFS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bucher Industries AG and SFS Group AG, you can compare the effects of market volatilities on Bucher Industries and SFS Group and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bucher Industries with a short position of SFS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bucher Industries and SFS Group.
Diversification Opportunities for Bucher Industries and SFS Group
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bucher and SFS is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bucher Industries AG and SFS Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFS Group AG and Bucher Industries is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bucher Industries AG are associated (or correlated) with SFS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFS Group AG has no effect on the direction of Bucher Industries i.e., Bucher Industries and SFS Group go up and down completely randomly.
Pair Corralation between Bucher Industries and SFS Group
Assuming the 90 days trading horizon Bucher Industries AG is expected to under-perform the SFS Group. But the stock apears to be less risky and, when comparing its historical volatility, Bucher Industries AG is 1.07 times less risky than SFS Group. The stock trades about 0.0 of its potential returns per unit of risk. The SFS Group AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8,726 in SFS Group AG on August 27, 2024 and sell it today you would earn a total of 3,734 from holding SFS Group AG or generate 42.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bucher Industries AG vs. SFS Group AG
Performance |
| Timeline |
| Bucher Industries |
| SFS Group AG |
Bucher Industries and SFS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bucher Industries and SFS Group
The main advantage of trading using opposite Bucher Industries and SFS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bucher Industries position performs unexpectedly, SFS Group can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SFS Group will offset losses from the drop in SFS Group's long position.| Bucher Industries vs. OC Oerlikon Corp | Bucher Industries vs. Helvetia Holding AG | Bucher Industries vs. Swiss Life Holding | Bucher Industries vs. VAT Group AG |
| SFS Group vs. VAT Group AG | SFS Group vs. Bucher Industries AG | SFS Group vs. Comet Holding AG | SFS Group vs. Daetwyl I |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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